After The Bell: US stimulus helps Nifty to record highs, what should investors do on Tuesday?

Indian markets closed in the green for the fourth consecutive day on December 28, pushing benchmark indices to record highs. The S&P BSE Sensex hit a record high of 47,406, while the Nifty50 hit a high of 13,885.30.

The S&P BSE Sensex closed 380 points higher at 47,353, while the Nifty50 was up 123 points to close at 13,873.

Sectorally, action was seen in realty, metals, consumer durables, public sector, Bankex and capital goods stocks.

On the broader markets front, the S&P BSE midcap index closed with gains of 0.8 percent, while the smallcap index was up 1.4 percent.

Experts are of the view that the US stimulus package triggered risk-on sentiment in equity markets across the globe. The momentum is likely to continue in the near-term.

“Indian market started on an upbeat note in the final week of the year owing to positive global cues. The global market cheered the news of the $2.3-trillion pandemic stimulus announced in the US and the historic post-Brexit trade deal struck between the UK and EU,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“The advancement of a rollout of COVID-19 vaccines in India, too, uplifted domestic sentiments, leading to positive momentum across all the sectors,” he said.

Nair expects the momentum to continue as investors focus on the positive side of these events and not worry about peak valuations and lockdowns triggered by the new strain of the virus

Here is what experts think that investors should do on December 29:

Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities

Led by financials and commodity stocks, the Indian market surged for the fourth consecutive trading sessions, with the Nifty 50 index ending nearly 1 percent higher to close at 13,873.20.

The 13,750 levels would serve as a major support to the market and our strategy would be to buy with a short-term view.

Rohit Singre, Senior Technical Analyst at LKP Securities

The index has decisively crossed the 13,800 zone, which was a good hurdle and managed to close above the same hinting fresh doors are open for the 14,000-mark on the higher side if the index manages to hold above 13,800 zone. Good support for the index is still placed at 13820-13770 and resistance near 13,900-14,000 zone.

Binod Modi, Head Strategy, Reliance Securities

Domestic equities continue to look good given the improved prospects of earnings recovery. Strong improvement in advance corporate tax data for 3Q and consistent improvement in high-frequency economic data indicate strong earnings recovery.

However, considering it is the last week of 2020 (which essentially results in portfolio rebalancing by a number of investors) and F&O expiry, volatility is expected to be high. In our view, 3QFY21 corporate earnings are to be a key catalyst for markets in the near term.

Considering rich valuations of the markets and threat emerging from higher input costs, the market rally might not be broad-based and therefore investors are advised to focus on quality stocks which offer decent margins of safety and strong earning potential.

Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited

The market witnessed a lackluster movement and lack of momentum. It stayed in the range between 13800 and 13880 and 13,750-13,780 would be a support zone.

As the market has sustained over the crucial level of 13750, we can expect the volatility to expand, which could lead to an upside projection till the levels of 13990.

The momentum indicators like RSI, MACD indicate that the positive outlook will continue and market breadth will improve.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.